 |
User: Login |
Weblog covering digital business
Digital Business, Live From New York. |
| Address URL | http://www.alleyinsider.com/ Registered: 22-Mar-2008 |
| Ads: | |
 Send to email | Google Refuses To Admit AOL Will Never Be Worth $20 Billion Again in GOOG |  By Silicon
el 07-Aug-2008 |
fingersinears.jpg: Paste this image in your site, Myspace, Facebook, Ebay copy this code...
 In its latest 10Q, Google (GOOG) admits that its $1 billion investment in AOL "may be impaired" (note spotted by sharp-eyed Rafat Ali). This is a polite way of saying that the investment is now worth a lot less than the $1 billion Google paid for it--and that, by extension, AOL is worth a lot less than the $20 billion valuation Google placed on it in 2005 when it bought 5% of the company.
Of course, we knew that already. The highest estimates of AOL's value these days usually top out at around $10 billion ($15 billion if Microsoft goes into a testosterone-fueled bidding-war rage). This would put the value of Google's 5% stake at, say, $500 million to $750 million.
What's most interesting about Google's AOL note, however, is that the company believes the impairment may be temporary (expressed below as not believing the impairment is other than temporary). This is a polite way of saying that Google is dreaming that AOL might actually recoup some of its vaporized value someday:
we believe our investment in AOL may be impaired. After consideration of the duration of the impairment, as well as the reasons for any decline in value and the potential recovery period, we do not believe that such impairment is 'other-than-temporary' at June 30, 2008 as defined under FSP 115-1. As a result, our investment in this non-marketable equity security is carried at cost on our Consolidated Balance Sheets. We will continue to review this investment for impairment in the future. There can be no assurance that impairment charges will not be required in the future.
Google is not a dishonest company, so it would be interesting to hear Google's finance team defend this position. (The folks at Time Warner would no double be interested, too, especially with AOL informally on the block.)
In any event, if and when Google decides to admit that AOL will never be worth more than $20 billion again, it will have to take an impairment charge. Given Google's fire-hose of profit, this will--for all practical purposes--be immaterial.
See Also: Will Google Force Time Warner To Take AOL Public? No
Read 1 times
|
|
 |
| Googleclick: A Megadeal That Makes Money | | Google spent $3.2 billion and nearly a year of regulatory hell to get DoubleClick. Was it worth it? Yes, says Lehman analyst Doug Anmuth (via PaidContent): DoubleClick will immediately add $300 million in revenue and $50- $60 million in Ebitda.
Of course, that contribution is still minimal in the near-term: Last year Google (GOOG) posted Ebitda of $6.06 billion. The real upside will kic [..] Read complete article | | Published 24-Mar-2008 by Silicon in RIPGOOG
Read 8 times. More hits in   |
|
| Google's Android GPhone Already a Flop | | Google's forthcoming GPhone is critical to helping Google unlock the dreamy $50 billion market for mobile advertising that Eric Schmidt keeps talking about. It's critical to proving that Google can be successful at something besides search. [..] Read complete article | | Published 07-Sep-2008 by Silicon in General
Read 0 times. More hits in |
|
|
Warning We are not responsible of information posted from external feeds. Use this website at your own risk.
Notice: We will not be liable for any direct or indirect loss or damage arising under this disclaimer or in connection with our website, whether arising in tort, contract, or otherwise.
|
|
| |
Hello, Guest
Online: 96 visitors
+ fotos
Good catch by AllThingsD's John Paczkowski: Apple's (AAPL) market cap, nearing $159 billion, has eclipsed Google's (GOOG), at $157 billion. The companies' six-month charts, courtesy Yahoo Finance:
[..] 
We know Facebook probably isn't worth $15 billion. So, how about a quarter of that, or $3.75 billion? That's the valuation that Facebook internally assigned to the shares it paid [..] 
What is Facebook really worth? We know it's not worth $15 billion -- earlier this week a federal court, ruling on the ConnectU case, [..] 
Twitter's not going to make their money with advertising. So how can they be a Billion Dollar Company in a year?
Twitter should take full advantage of their messaging platform, [..] 
One byproduct of Google buying DoubleClick is a close association with the Network Advertising Initiative, the trade organization that DoubleClick helped found and which publishes guidelines reg [..] 
We missed this the first couple times we looked at Google's 10-Q, but Lehman's Doug Anmuth picked up on it: Google is holding $259.6 million worth of "auction rate securities", and [..] 
You're a developer. Or at least you could be. Maybe you have a day job. Maybe you don't. Is it worth your time to build an app, for free, send it to Google, and see if they'll pay you for it? [..] 
Remember all those $900-$1000 Google (GOOG) price targets analysts were throwing around last year, when Google blasted through $700? Well, those were just typical Wall Street price targets [..] 
Merrill Lynch's mortgage gambling tab keeps growing (MER). $8 billion in Q3, $12 billion in Q4, and now another $9 billion in Q1. That's $29 billion all told (so far), or approximately [..] 
